Is all the pain of recession and public sector pension attacks really worth it? Surely not when we have the ability to create money out of thin air and spend it into the economy!
This is what Mervyn King has done once again he said ‘"We're creating money because there's not enough money in the economy," The Bank of England has taken action to kick start Britain's flat lined economy by pumping another £75bn into the banking system, more than economists had expected. He went on to say "There is not enough money (in the economy). That may seem unfamiliar to people." http://www.guardian.co.uk/business/2011/oct/06/britain-financial-crisis-quantitative-easing
This now means the Bank of England, a state owned central bank, has created £275bn of electronic money – out of thin air – and has given this to the failing banks in the vain hope they will then pass the money on, with interest, to the rest of us and to companies in the form of loans and mortgages. The banks have had £275bn of free money. You can find all of this out here http://www.bankofengland.co.uk/markets/apf/index.htm
But we are forced to take a cut in our living standards and attacks on our pensions because the banks, in their pursuit of bonuses, created too much money and lent it out at a very high risk. Now as Mervyn acknowledges the banks are not lending which means the amount of money in our economy is shrinking. As the money shrinks so people stop spending, companies lay off workers and we go into a decline that can only be addressed by adding more money.
Don’t be fooled by the term quantitative easing – it simply means creating new money out of thin air simply by typing figures into a bank account. This is what your bank does when you get a loan, it creates money out of thin air, by typing figures into your account.
So what do we conclude from this action? Well, firstly money can be created by the Bank of England out of thin air, debt free, no interest to pay. That means it could do the same to pay for public sector infrastructure it could provide the money to build hospitals and schools, paying for the wages of the workers who in turn would spend them into the economy. Once the economy got going again the government could pay down its debts faster than cutting pay and attacking pensions.
Here is a world free from the debt slavery that the current banking system puts us in – were money is only available to people who can borrow. This is the vision we must carry as we fight for our jobs, real pay increases and of course our pensions. Let no one tell you there is no money, that its run out…it’s available now at the touch of Mervyn’s key board! Let us ask for some to fix our world and put people back to work!
